Naira rallied as inflows from purchases of local debt offset any increase in corporate demand for dollars. The currency of Africa’s biggest oil producer climbed 0.1 percent to 157.59 a dollar as of 12:48 p.m. on the interbank market in Lagos. The naira has appreciated 3 percent this year, the best performer in Africa. Nigeria’s seven-year borrowing costs dropped 324 basis points to a record low at a monthly debt auction last week after JPMorgan Chase & Co. said it may include the bonds in its emerging-market index series on Oct. 1 over a three month phased period. “An important recent development in strengthening naira sentiment was the decision by JP Morgan to include Nigerian government bonds in its Emerging Market Government Bond Index,� Ecobank Transnational Inc. analysts, led by Paul-Harry Aithnard in Paris, wrote in a report today. “It will help increase demand for naira as funds that track the index seek to buy Nigerian government securities in order to maintain their replication of the index.� The yield on Nigeria’s 7 percent domestic bonds due June 2019 rose seven basis points to 12.61 percent, according to yesterday’s data on the Financial Markets Dealers Association website. Yields on the nation’s $500 million of Eurobonds due January 2021 were little changed at 4.78 percent today. Inflows into bonds “should therefore offset any depreciatory pressure arising from corporate demand,� sustaining the naira below 158 per dollar, Celeste Fauconnier and Nema Ramkhelawan-Bhana, strategists at Rand Merchant Bank in Johannesburg, wrote in an e-mailed note to clients today.

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